The Olympics and charities

Grabbing for gold

Charities are bearing the brunt of rising costs but they will also gain

“I FEEL I have done my bit. I have remortgaged my flat twice. I have no savings. I have nothing.” Camila Batmanghelidjh, the founder of Kids Company, a youth charity, was in campaigning mode in an interview published on August 19th as she gave warning that without more reliable funding she would have to close. The main target of her appeal was the government, which is to announce changes to charities' funding in October. But partly to blame, she said, were London's forthcoming Olympic Games, five years away.

London's bid for the Olympics played up the benevolent legacy that they would leave in their wake. Yet charities increasingly feel that they may do more harm than good. The chief complaint is that a big dollop of Olympic money is coming from the national lottery's charitable fund. In March, when the government admitted that the public cost of the games had almost trebled, the contribution demanded from the fund spiralled from £410m to £1.1 billion. Its income has also been hit by a new “Olympic” lottery, three-quarters of whose sales are thought to cannibalise the ordinary lottery's market. Last month the National Audit Office, a spending watchdog, said charities would lose £1.7 billion of lottery cash to the Olympics in total.

Ms Batmanghelidjh has identified another problem. Some 40% of her donations come from businesses, with around 30 large companies—banks, law firms and the like—making up the bulk. Now, she reports, some are planning to divert money into sponsoring the games. Association with the Olympic rings and free seats in a company box are more appealing than helping a “small charity at the bottom of Peckham”, she fears.

Not so, say sponsors. Lloyds TSB and EDF, the two major partners of the London games so far, say their sponsorship money comes from their marketing budgets and will not affect their community work. The £50m or so asked of sponsors for the unrivalled advertising opportunity is beyond the charitable budget of most companies.

Things may be looking up. In June the government promised to refund some of the plundered lottery cash using profits from selling the Olympic site. And arts charities will benefit from the four-year “Cultural Olympiad” festival preceding the games. Robin Simpson of the Voluntary Arts Network, which represents some 50,000 brass bands, drama troupes and the like, expects some of the lost lottery money will be given back to them for this purpose. “We're trying hard not to be negative about the Olympics,” he says bravely.

What charities have lost in cash, they may gain in manpower. Some 70,000 volunteers will work at the games, and it is hoped they will keep up the voluntary habit after the closing ceremony. The 2000 Sydney Olympics saw a growth in volunteering for sporting causes—but also elsewhere. Money might be limited, but volunteering seems to be infectious.